Reconfiguration Of Small Network

Hi All,

Currently we have the following network setup:

3 Servers (2 Physical 1 Virtual)

2 Physical Servers:

ONE running 2008R2 (PDC) and being the AD DS, RDP server and DNS server AND the Hyper V host
TWO running 2012R2 being a DC and also storing backups of 2008R2 server state.
VIRTU running 2008R2 and being hosted on server ONE. Users all RDP to this server and it provides word, excel etc and our own software that runs in IIS.

We're having problems with the VM crashing a lot. Things have settled as we have gone through resolving DNS and other issues but we have been advised to upgrade to 2012R2.

So before agreeing on a way forward, I'd really appreciate some input on the best set up.

The idea is:

Upgrade server ONE to 2012R2 and then create a VM of it (call it VMONE).
Remove all roles on ONE except RDS and Hyper V
Install VMONE on ONE as the PDC with AD DS, DNS etc.

Happy to add additional physical servers if required. The physical server ONE is a dual CPU, 36GB RAM server. Server TWO is a single CPU 8GB ram server that has very little load other than backup services and DC role.

Any suggestions gratefully received.